Form Over Substance in Fifth Circuit Tax Cases
34 Texas Tech L. Rev. 733 (2003)
66 Pages Posted: 12 Jun 2015
Date Written: November 27, 2002
This article studies and critiques cases interpreting the Internal Revenue Code issued by the Fifth Circuit between June 1, 2001 and May 31, 2002. It's thesis is that in these cases the Fifth Circuit showed a distressing tendency to prefer form over substance and pretty much mangled economic concepts. Leading cases reviewed include: (1) the Compaq case, which involved a misapplication of the economic substance doctrine; (2) the Cheshire case, a leading case in the development of doctrines of judicial review over agency administrative decisions (here, involving innocent spouse relief); (3) the Jameson case, which involved a misapplication of estate valuation methodologies; and (4) the Hathcock case, an employee leasing case that demonstrates how employers in the Fifth Circuit can avoid tax obligations by changing formal structures of employment.
Keywords: IRS, Compaq, Cheshire, Jameson, estate valuation, valuation methodologies, administrative law, tax administration, form over substance, substance over form, economic substance doctrine, judicial review, agency decisionmaking, innocent spouse, tax shelters, employee leasing
JEL Classification: B49, H24, K23, K34, K41, K42
Suggested Citation: Suggested Citation